Revocation of NY N255298 (July 31, 2014); Tariff classification of a solar module from an undisclosed country of origin

H258440 March 4, 2022 OT:RR:CTF:EMAIN H258440 DSR CATEGORY: Classification TARIFF NO.: 8451.40.60 Janet Takushi Senior Consultant Livingston International Professional Services 670 Young Street Tonawanda, NY 14150 RE: Revocation of NY N255298 (July 31, 2014); Tariff classification of a solar module from an undisclosed country of origin Dear Ms. Takushi: This letter is in response to a request for reconsideration submitted by you on behalf of your client, Solarmass Energy Group, Ltd., concerning New York Ruling Letter (NY) N255298, dated July 31, 2014. That ruling concerned the classification of a solar module under the 2014 Harmonized Tariff Schedule of the United States (HTSUS). The ruling classified the article under subheading 8501.31.80, HTSUS, which provides for “Electric motors and generators (excluding generating sets): Other DC motors; DC generators: Of an output not exceeding 750 W: Generators.” We have reviewed the tariff classification of the article taking into consideration the additional information you provided in your reconsideration request and have determined that the cited ruling is in error. Therefore, NY N255298 is revoked for the reasons set forth in this ruling. Notice of the proposed action was published in the Customs Bulletin, Vol. 56, No. 2, on January 19, 2022. No comments were received in response to that notice. FACTS: In NY N255298, the device is described, in relevant part, as follows: The merchandise in question is described as a Solar Surface, which is the solar generating component of the Ergosun™ Solar Roof Tile. This device consists of an ultra-thin solar cell membrane attached to a connector board and insulating poly-vinyl fluoride (Tedlar®) backing. The attached connector board contains a diode that prevents back feed and overheating, and male and female connector plugs which are used to connect multiple solar panels together to generate DC electricity. Additional information submitted with the reconsideration request characterizes the diode as a “bypass diode” that “regulates the direct current (‘DC’) which is connected to a third-party inverter located in the home where the DC energy is converted to alternating current (“AC”).” That AC energy is ultimately fed from the inverter to a meter and, from there, to the home’s electrical panel…” The imported solar module will be applied to roof tiles in the United States and sold to consumers and businesses. ISSUE: Is the module described above classifiable under heading 8501, HTSUS, which provides for electric generators, or under heading 8541, HTSUS, which provides for photosensitive semiconductor devices? LAW AND ANALYSIS: Classification under the HTSUS is made in accordance with the General Rules of Interpretation (GRI's). GRI 1 provides that the classification of goods shall be determined according to the terms of the headings of the tariff schedule and any relative section or chapter notes. In the event that the goods cannot be classified solely based on GRI 1, and if the headings and legal notes do not otherwise require, the remaining GRI’s 2 through 6 may then be applied in order. In addition, in interpreting the HTSUS, the Explanatory Notes (ENs) of the Harmonized Commodity Description and Coding System may be utilized. The ENs, although not dispositive or legally binding, provide a commentary on the scope of each heading, and are generally indicative of the proper interpretation of the HTSUS. See T.D. 89 80, 54 Fed. Reg. 35127 (August 23, 1989). The following HTSUS provisions are under consideration: 8501 Electric motors and generators (excluding generating sets): Other DC motors: DC generators: 8501.31 Of an output not exceeding 750 W: 8501.31.80 Generators. * * * 8541 Diodes, transistors and similar semiconductor devices; photosensitive semiconductor devices, including photovoltaic cells whether or not assembled in modules or made up into panels; light-emitting diodes (LED); mounted piezoelectric crystals; parts thereof: 8541.40 Photosensitive semiconductor devices, including photovoltaic cells whether or not assembled in modules or made up into panels; light-emitting diodes (LED): 8541.40.60 Other diodes. Explanatory Note (“EN”) 85.01(II) describes two categories of items that are specifically included in heading 8501. HTSUS. To wit, the EN states: 2 (II) ELECTRIC GENERATORS Machines that produce electrical power from various energy sources (mechanical, solar, etc.) are classified here, provided they are not more specifically covered by any other heading of the Nomenclature. ... The heading also covers photovoltaic generators consisting of panels of photocells combined with other apparatus, e.g., storage batteries and electronic controls (voltage regulator, inverter, etc.) and panels or modules equipped with elements, however simple (for example, diodes to control the direction of the current), which supply the power directly to, for example, a motor, an electrolyser. In these devices, electricity is produced by means of solar cells which convert solar energy directly into electricity (photovoltaic conversion). … EN 85.41 provides, in pertinent part: (B) PHOTOSENSITIVE SEMICONDUCTOR DEVICES This group comprises photosensitive semiconductor devices in which the action of visible rays, infra-red rays or ultra-violet rays causes variations in resistivity or generates and electromotive force, by the internal photoelectric effect. *** The main types of photosensitive semiconductor devices are: *** (2) Photovoltaic cells, which convert light directly into electrical energy without the need for an external source of current. […] Special categories of photovoltaic cells are: (i) Solar cells, silicon photovoltaic cells which convert sunlight directly into electric energy. They are usually used in groups such as source of electric power, e.g., in rockets or satellites employed in space research, for mountain rescue transmitters. The heading also covers solar cells, whether or not assembled in modules or made into panels. However, the heading does not cover panels or modules equipped with elements, however simple, (for example, diodes to control the direction of current), which supply the power directly to, for example, a motor, an electrolyser (heading 85.01). Thus, per the ENs, panels or modules with elements that can supply the power directly to an external load, are precluded from classification in heading 8541, HTSUS, and are classified in heading 8501, HTSUS. In Headquarters Rulings Letter (HQ) H084604, dated May 3, 2010, CBP noted that “a solar module is not precluded from classification under heading 8541, HTSUS, simply because it contains “elements,” e.g., diodes which control the direction of the current). Those elements must also “supply power directly” to an external load, such as 3 a motor or an electrolyser. See EN 85.01(II), supra. CBP then classified the device as a photosensitive semiconductor device in subheading 8541.40.60, HTSUS, because the device lacked pertinent indicators of being a generator of heading 8501, HTSUS, e.g., blocking diodes and inverters to convert DC power produced by the solar panels into AC power usable by items intended devices. In sum, the solar panels provided for in H084604 were not able or intended to be used as generators. The determination of whether a given solar panel is classified as a solar generator of heading 8501, HTSUS, or as a panel of photovoltaic cells of heading 8541, HTSUS, is based on whether the subject device is equipped with elements that allow it to supply power directly to another article (i.e., an external load) that consumes such power. Here, the answer is no. While the solar module of NY N255298 produces electrical power, i.e., DC current, from its solar cells, that current is intended to pass through to multiple connected solar modules and eventually to an external inverter located in a home. The current produced by the panel is not usable until it is converted to AC by the inverter. The solar module essentially functions in a manner that is comparable to the solar module considered in HQ H250768 (December 2, 2016) (a solar module that could only connect to other solar modules and could not supply power to any external loads classified in heading 8541, HTSUS). For the reasons explained above, NY N255298 is revoked and the subject solar module is now classified in subheading 8541.40.60, HTSUS, which provides for “Diodes, transistors and similar semiconductor devices; photosensitive semiconductor devices, including photovoltaic cells whether or not assembled in modules or made up into panels; light-emitting diodes (LED); mounted piezoelectric crystals; parts thereof: Photosensitive semiconductor devices, including photovoltaic cells whether or not assembled in modules or made up into panels; light-emitting diodes (LED): Other diodes.” HOLDING: By application of GRI 1, the solar module is classifiable under heading 8541, HTSUS. Specifically, by application of GRI 6, it is classifiable subheading 8541.40.60, HTSUS, which provides for “Diodes, transistors and similar semiconductor devices; photosensitive semiconductor devices, including photovoltaic cells whether or not assembled in modules or made up into panels; light-emitting diodes (LED); mounted piezoelectric crystals; parts thereof: Photosensitive semiconductor devices, including photovoltaic cells whether or not assembled in modules or made up into panels; light- emitting diodes (LED): Other diodes.” The column one, general rate of duty is “Free.” Duty rates are provided for your convenience and subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided at www.usitc.gov. On January 23, 2018, Presidential Proclamation 9693 imposed safeguard measures on imports of crystalline silicon photovoltaic (CSPV) cells and certain 4 products incorporating CSPV cells in the form of additional tariffs or tariff rate quotas for a period of three years. Such products classified under subheading 8541.40.60, HTSUS, unless specifically excluded, are subject to the additional duties. See Note 18 to Chapter 99 and subheadings 9903.45.21 through 9903.45.25, HTSUS. EFFECT ON OTHER RULINGS: NY N255298 (July 31, 2014) is hereby revoked in accordance with this decision. In accordance with 19 U.S.C. §1625(c), this ruling will become effective 60 days after publication in the Customs Bulletin. Sincerely, for Craig T. Clark, Director Commercial and Trade Facilitation Division 5